The inexhaustible Pharmally mysteries

© Philippines Daily Inquirer

The staggering revelations that continue to come out of the Senate’s investigation into the P11.486 billion worth of contracts snagged by woefully undercapitalized Pharmally Pharmaceutical Corp. are pointing to “the makings of a scam of the decade,” as Bayan secretary-general Renato Reyes Jr. has put it.


It does not take much for an average Filipino, whose taxes may have been used to enrich those heartless enough to profit amid a pandemic, to arrive at the same conclusion. The grimly disturbing facts so far unearthed by the Senate blue ribbon committee speak for themselves. Consider:

Pharmally Pharmaceutical Corp. was incorporated in September 2019 with a paid-up capital of just P625,000, and yet the company with zero track record was awarded P11.486 billion worth of contracts in 2020 and 2021 to supply surgical masks, personal protective equipment (PPE) sets, COVID-19 test kits, and face shields.

These contracts were allegedly carved out of the P42 billion that the Department of Health transferred to the Procurement Service of the Department of Budget and Management (PS-DBM) sans supporting documents, a move that was flagged by the Commission on Audit, triggering the investigation by the Senate committee chaired by Sen. Richard Gordon.

The Senate has determined that Pharmally’s test kit was sold to the government in 2020 at P1,720 each, nearly double the P925 quoted by its competitors, while its PPE were sold at P1,910 each, more than double the prevailing market price then of P945.

The Senate tried to serve subpoenas to Pharmally executives who all listed the same address in Taguig City; the address turned out to have been vacant since 2018. Likewise, the supposed Taguig headquarters stated in Pharmally documents submitted to the Securities and Exchange Commission were found to be no longer connected to Pharmally.

How did a company with so little capital manage to meet its obligations? Pharmally CEO and part-owner Huang Tzu Yen — who, along with his father, is wanted in Taiwan for financial crimes including stock manipulation—revealed on Sept. 10 that it was Michael Yang, a former “presidential adviser for economic affairs” to President Duterte, who personally loaned money to Pharmally so it could pay its Chinese suppliers.

Pharmally’s Linconn Ong said Yang “helped” Pharmally settle its obligations to Chinese suppliers for a P3.82-billion deal for PPE sets, a P2.88-billion contract for COVID-19 test kits, and another P600-million agreement for reverse transcription polymerase chain reaction test kits.

Yang had earlier claimed that he had only introduced Pharmally to his contacts in China. The testimonies now say Yang was both guarantor and financier of Pharmally. Gordon said this could be grounds for the Anti-Money Laundering Council to step in and determine if there was possible money laundering involved.


More mysteries in the Pharmally saga: Incorporator Krizle Mago told senators that Pharmally delivered 500,000 face masks on March 25, 2020—the very same day that Pharmally received a request for quotation from PS-DBM. By any measure, this was an amazingly speedy government transaction. However, the purchase order for the masks that Pharmally sold for P27.72 apiece was issued only on April 6, followed by payment on April 15.

On at least two occasions, according to PS-DBM personnel, they were also made to sign the inspection documents for the PPE shipments even before the items had been inspected and delivered from China. Were there “ghost” deliveries, or no actual deliveries made?

Aside from the Senate probe, the Citizens’ Budget Tracker and the Right to Know, Right Now! Coalition recently joined forces to produce an independent analysis of Pharmally. Their study noted serious deficiencies in the company’s regulatory and reporting compliance, as well as missing and incomplete disclosures in its 2020 financial statements. Pharmally is “not technically, legally and financially eligible and less competitive than domestic suppliers,” concluded Citizens’ Budget Tracker coordinator Ken Abante.

And yet, as more revelations are coming out indicating possible massive corruption and plunder in the Pharmally deals, the President who has vowed an unforgiving stand against even a “whiff” of wrongdoing in government has mounted a strident defense of Yang and the Pharmally transactions while denigrating the work of the Senate, a co-equal body. This early, Mr. Duterte has made plain his hostility to the idea of getting to the bottom of things. He has resorted to a by-now threadbare playbook—deploying a blizzard of distractions, from vilifying individual senators to decrying so-called politicking to dismissing congressional probes as amounting to nothing anyway, to try to dissipate the stink.

It will not work. The Pharmally swamp is turning out to be too big, too deep, too rotten, and this time, many more people are hungry, weary, and mad as hell.

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